Choosing a new finance system

I wrote a while back about whether you really needed a new finance system.

If you’re reviewing your accounting system I would always recommend you go through these checks first. Having done this and decided that you definitely do need something different, how do you go about choosing a new finance system?

Have a robust selection process

It’s possible that you have a really strong view already about what you want to use. Perhaps you’ve used a particular finance system at a previous organisation.

No matter what size organisation you work for, I would strongly recommend going through some form of formal selection exercise, for the following reasons:

• Technology changes, and what was the perfect solution three years ago might not be now.
• Price comparison and negotiation. Even if you end up with your original preference, it’s good to check that the price being asked is reasonable, and you may be able to use comparison with a competitor to get it down.
• Honing the right solution. You may see ideas from one programme that informs the development of your preferred option.
• Getting organisational buy-in from the start. If the new finance system will rely on anyone else to implement or operate it, it’s vital that the people involved feel like the system is truly theirs. This means having continuity between the selection team and the implementation team.

Have a detailed specification and a clear vision

I think you should specify what you want in two ways.

Firstly, a traditional specification type document, which should be really detailed. Set out absolutely everything you want the system to do and state whether each item is essential or desirable. When I say everything, I mean everything. Do not assume anything comes as standard and in particular think about the processes you run every day.

The specification document can be sent to short listed suppliers for completion and for them to tailor their demos; it will also allow you to score products against each other.

As well as a detailed specification document, you also need a vision. How is your life (or your customers’ experience) going to be better with this system? What are you going to be doing that you can’t do now? The vision is for your project team and stakeholders. It also helps you prioritise which of your hundreds of specification points really matter.

Try to involve everyone who will be affected by the system (or representatives if impractical). For example, if you are bringing in a new purchase order or invoice approval system, involve the people who will be signing these off, not just finance staff.

Identify a long list of potential suppliers and use the vision to shorten it

I will always seek out the opinion of my peers and others working in similar roles to suggest suitable systems, that is, systems they have had experience in using and would recommend, or at least haven’t hated too much.

The key questions at this point are – what do you like about it, what do you hate about it, and what do you wish it did that it doesn’t? You also want to establish which suppliers match the size of your business.

I would then approach this long list of suppliers with a summary of what I’m looking for; our vision, a couple of really precise “must haves” from the specification, and something about the size of our organisation and our transaction levels.

I always ask for a ball park price at this stage, although most suppliers are unwilling to provide this without more time with you and your specification. I explain that I won’t be holding them to this price and I understand that it will change when they know more about the business. However, I need to know whether the system is going to cost hundreds, thousands, or tens of thousands so that we don’t waste each other’s time.

Invite the short listed contenders to a first demonstration.

You should now have a shorter list of possible new finance system providers.

Provide the short listed contenders with your specification document and invite them to demo their product. I suggest 2-3 hours is enough time to get the idea at this stage.

You’ll probably end up with a preferred supplier at this stage, and potentially a back up. If you have more than two, you probably need to hold a second round of demos.

Further research into your preferred supplier(s).

Your preferred supplier will probably give you an existing customer to talk to. Do this, but also try to talk to another customer that they haven’t suggested. There may also be a user group they can put you in touch with. This is the opportunity to find out more about the strengths and weaknesses of the system from the customer perspective. Ask how the customer support has been. Find out what new developments have been added since the initial implementation. Did the initial implementation go according to plan and budget?

Other things to find out from your supplier before committing to a relationship with them:

• what size customers do they usually deal with?
• How many customers like you do they have?
• How often do they update the product and will you get those updates automatically?
• What developments are they looking at in the next year?

Make sure you thoroughly understand the pricing structure for implementation and support and any minimum contract terms. This is also the time to scrutinise the solution from an IT security perspective. Find out where your data will be held and whether it passes through any intermediaries. Consider whether you need to complete a Data Protection Impact Assessment, and if so, do this now, with the supplier.

You can ask to see standard contracts so that you can review these before you commit to going ahead.

Go / No Go?

By this point you may have partially talked yourself out of going ahead!  If you’ve researched the supplier and the offering in this level of detail you are bound to have found some negative points.

This is good. You want to know these before you make the final decision.

This is where the vision comes in useful. It allows you to take that step back away from the detail and see whether the solution is going to deliver what you most need it to and check that the benefits outweigh the negatives.

Systems implementations are expensive and disruptive, and once you’ve started and paid the deposit there isn’t usually a way back. However, if you have followed this process you (and the team) will be going into this project with a strong vision and realistic expectations;. Alternatively you’ll be going back to an earlier part of the process but with a better idea about what questions to ask up front.

Want help with your systems implementation project? See this page for more information.